NC: Prenuptial Agreements
Prenuptial Agreements provide:
- Full disclosure of both parties’ assets and property rights before entering marriage
- Formulated objectives for the parties’ finances during marriage
- Designated separate assets that cannot be distributed as marital property
- Clearly established property rights for the parties’ current and future assets
- Defined responsibilities for the parties’ current and future debts
- Provisions for children of either party from a previous relationship
- Transparent plan for an equitable distribution of assets in the event of a divorce
Executing Prenuptial Agreements
In order to execute a valid prenuptial agreement, the agreement must be in writing and signed by both parties. Consideration is not required to enforce a prenuptial agreement.
Enforcing Prenuptial Agreements
If a prenuptial agreement is later challenged, attorneys and courts will ask two important questions: 1) whether the agreement was voluntarily entered; and 2) whether there was full and fair financial disclosure regarding the parties’ income, assets, and liabilities.
To execute a prenuptial agreement, the parties should plan to execute the agreement well in advance of their wedding day. The parties need time to understand the terms of the agreement in order to approve of its contents. Allowing time to execute the agreement before the wedding day will portray that it was signed voluntarily, with the parties having time to make a full and fair financial disclosure to one another.
Restraints on Prenuptial Agreements
There are some issues not covered by prenuptial agreements because such terms would be unenforceable by law. Parties may not make decisions pertaining to child custody or child support in their prenuptial agreement. Additionally, a waiver of alimony will be unenforceable if the party who waived alimony would become eligible for a public assistance program at the time of separation. Further, the parties may not designate an incentive for divorce. Also, any terms whereby the parties agree to act unlawfully will not be upheld. A prenuptial agreement also cannot specify either of the parties’ non-financial responsibilities. Additionally, a prenuptial agreement may not be “unconscionable” or grossly unfair, even if both parties agree to the terms.Back